One of its first tasks was to develop Jurong into an industrial estate, as part of a push to create labor-intensive industries that would generate jobs for the people. Some of the early factories produced items such as garments, toys and wigs.
In 1963, the newly formed Federation of Malaysia came under attack by Indonesia. Back then, Indonesia believed that Malaysia was formed to contain Indonesian influence in the region. Thus, it embarked on Konfrontasi, a low-intensity confrontation between Indonesia and Malaysia.
Led by then-President Sukarno, Indonesia carried out acts of subversion and sabotage, such as bombings, to destabilize Malaysia between 1963-66. Moreover, it cut trade ties with Malaysia, hoping to disrupt its trade and cripple its economy.
However, the push to develop labor-intensive industries was so effective that by the 1970s, labor surplus turned into a labor shortage. This diminishing supply in turn caused labor costs to rise in Singapore.
At the same time, countries such as Indonesia and Malaysia were just firing up their industrialization plans. Their large labor force posed direct competition to Singapore, and hence we had to work through the 1970s to address our labor shortage.
In order to keep growing, Singapore had to adjust its economic strategy away from labor-intensive industries and into higher-value goods. This would ensure that Singapore’s workers continue to see a flow of jobs and income.
One, attract new foreign investment in higher-value manufacturing, such as petrochemicals and precision engineering by providing tax incentives. Two, to upgrade and upskill workers across the economy in a bid to raise productivity.
We must first break the vicious circle of low wages sustaining too labor-intensive activities, which lead in turn to poor productivity growth, an over-tight labor market and slower economic growth. Corrective wage increases over 3 years will force employers to save labor. Underemployed labor will be released for more productive employment in the better industries and services.
Despite the challenges, then-PM Lee believed that it was the right decision, especially in the long run. For one, building the airport near the sea would provide the sufficient space for future expansion, and allowing aircraft to enter Singapore over the sea would reduce the noise pollution for residents.
The 1985 recession was a painful but important reminder that Singapore could not afford to stand still. Moreover, the growth we saw prior to the recession had started to flag due to resource constraints and diminishing returns on investment.
One key success factor was the ability to constantly make Singapore relevant to the global economy. Without a large domestic market or natural resources, there is no real impetus for large companies to invest in us. Neither would large countries want to trade with a tiny island that had little to offer in return. However, we continued to reinvent ourselves, refining and reshaping our value proposition.
The reserves are something which is precious, which we have inherited, because our forefathers who were not wealthier than us, but who in good years, felt that they should put some money aside, save for the future, provide for their children and grandchildren. And make sure that Singapore will have a little nest egg, something extra to see us through a very tough spot one day and that is what it is. It gives us confidence. But at the same time, it is a reminder to us that we are the beneficiaries of what our forefathers did, and we have a responsibility to generations to come.
A by-product of populist sentiments is the rise of protectionist policies, and the rejection of globalization, free trade, and open borders.
Over 80 countries banned the export of medical and personal protective goods in the early phases of the pandemic.
During the Covid-19 pandemic, Singapore was one of few countries that maintains the free flow of goods and services. We did not impose export controls or restrictions on goods such as N95 masks even when there was a need for these products. Our sea and air ports remained open. This enhanced our reputation as a trusted partner and reliable logistics and transport hub among businesses and the international community.
By liberalizing trade, the region’s GDP could increase by at least 10%, reduce operational costs by up to 20%, and add $50B to ASEAN’s GDP.
It is no mean feat to make correct 5-year forecasts in Singapore and no small nerve to commit a few hundred million dollars based on one’s judgment.
The Construction industry is already implementing this, where about 99% of construction waste and metals are recycled for new projects. This push has reduced the country’s dependency on sand.
We should treat climate change defenses like we treat the SAF — with utmost seriousness. Both the SAF and climate change defenses are existential for Singapore. These are life and death matters.
It has been the world’s largest importer of sand for the last 20 years, bringing in an estimated 517M tonnes of sand in neighboring countries.
I make no apologies for collecting the most talented team I could find.
Who pays for all this? A Singapore economy which has been so finely tuned that it is able to take advantage of every opportunity that comes our way.
Singapore invests heavily on its military because it is the only way to deters its neighbors, even if they’re friendly now. One has to consider that this isn’t the case in the past.